Korean netizens are demanding strong legal action against HYBE Chairman Bang Si Hyuk following new testimony from former executive Min Hee Jin. The testimony relates to an ongoing fraud investigation involving HYBE’s initial public offering in 2020. Min Hee Jin claims Bang Si Hyuk told her in 2019 that the company had no plans to go public. This statement has become key evidence in a legal case about whether investors were misled before HYBE’s stock market debut.
Police are investigating allegations that Bang Si Hyuk and his associates secretly prepared for the IPO while telling others there were no such plans. This allowed certain funds to buy HYBE shares at low prices before the listing. These shares were sold for large profits after the company went public in October 2020. Retail investors suffered heavy losses when the stock price later fell sharply. The Financial Services Commission has already referred Bang to prosecutors on charges of fraudulent trading under the Capital Markets Act.
Min Hee Jin’s Key Testimony
Min Hee Jin stated that during her recruitment negotiations in January 2019, Bang Si Hyuk told her HYBE had no plans to go public. She says he advised her to take a cash signing bonus instead of stock options. Min Hee Jin joined HYBE in July 2019 as Chief Brand Officer. She trusted Bang’s advice and signed the contract based on his statements. Her testimony was submitted as evidence in her ongoing legal dispute with HYBE.
“In January 2019, when I met Chairman Bang in person to negotiate my salary contract, he told me, ‘There are no plans to go public,’ and suggested, ‘Cash is better than stock for incentives. Let’s replace it with a signing bonus.”
HYBE’s IPO Timeline Under Scrutiny
Evidence suggests HYBE had begun IPO preparations much earlier than claimed. The company applied to appoint an IPO-designated auditor in September-October 2019 and signed the contract in November. An accountant with IPO experience explained that companies typically need at least a year of preparation before going public. This suggests HYBE’s IPO plans existed as early as 2018 or earlier.
A private equity fund founded by Bang’s close associates was established in April 2019, just three months after his conversation with Min. This fund began buying HYBE shares from company insiders in June 2019. It accumulated shares at low prices before HYBE’s October 2020 IPO. After the listing, the fund sold its shares for nearly ten times what it paid. About 30% of the profits, worth approximately 400 billion KRW (288.6 million USD), reportedly went to Bang Si Hyuk.
Netizens Reactions and Public Outcry
Korean netizens have expressed strong opinions online about the case. Many are calling for serious consequences if Bang Si Hyuk is found guilty. Some comments show concern about equal treatment for all executives involved in the controversy.
“Those saying ‘Why would Bang tell Min Hee Jin that? She’s not an investor’ probably don’t even know what charges he’s facing, lol.”
“Is Bang even comparable to Min Hee Jin? He’s an economic criminal??”
“He needs proper punishment. If they go easy on him, everything will just go back to the same way.”
“If they only blame the female executives, won’t that put the artists at risk later? Female idols, especially, would be in danger.”
“For some people, pulling an idol’s hair is apparently worse than fraud, lol. Meanwhile, Bang commits large-scale fraud and still gets protected.”
HYBE’s Response and Legal Proceedings
HYBE has consistently stated there were no IPO plans in early 2019. The company claims full preparations only began in early 2020. HYBE has submitted documentation to support this timeline to authorities. Regarding Min Hee Jin’s testimony, a HYBE representative said that since it was a private conversation between Bang and Min, the company cannot verify it at the corporate level.
Bang Si Hyuk was questioned by the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency on September 15. His side stated to the press that the IPO process complied with laws and regulations at the time. They promised to cooperate actively with the investigation and clarify the matter sincerely.
Police have already raided the Korea Exchange in June to secure IPO review materials. Last month, they searched HYBE’s headquarters in Yongsan. The Securities and Futures Commission referred Bang to prosecution in July on charges of fraudulent trading. The prosecution has directed the Financial Supervisory Service’s special judicial police to lead the investigation.
Background of HYBE Corporation
HYBE Corporation began as Big Hit Entertainment in 2005 under founder Bang Si Hyuk. The company grew significantly through its management of global superstar BTS. In 2021, Big Hit rebranded to HYBE and expanded into a multi-label entertainment platform. HYBE now includes several subsidiary labels like Big Hit Music, Pledis Entertainment, and Source Music. The company manages artists such as BTS, SEVENTEEN, LE SSERAFIM, and NewJeans.
HYBE went public on the Korea Exchange in October 2020. The IPO was one of the largest in South Korea’s entertainment industry. The company’s stock price initially performed well but later experienced significant volatility. HYBE has since expanded internationally with offices in the United States and Japan.
Min Hee Jin was previously a creative director at SM Entertainment where she worked with many successful K-pop groups. She joined HYBE in 2019 and later became CEO of ADOR, a HYBE subsidiary. ADOR debuted the girl group NewJeans in 2022. Min Hee Jin has been in a legal dispute with HYBE over management control of ADOR.
The outcome of this case could significantly impact HYBE’s corporate governance and public perception. It also raises broader questions about transparency and ethical practices in South Korea’s entertainment industry. Investors and fans alike are watching closely as authorities continue their investigation.
Also Read: HYBE Chairman Bang Si Hyuk Faces Police Questioning Over Stock Fraud Allegations
Source: TheQoo
